Microtheory: Applications and Origins

Front Cover

This volume of seventeen previously published essays by William J. Baumol brings together work on the theory of contestable markets, welfare theory, antitrust, pricing, and the history of economic thought. Written between 1971 and 1983, they have sparked productive extensions and criticism in microeconomic theory and provide an engaging intellectual history of one of the leading figures in the field of economics. Baumol introduces each of the book's four parts, presenting his subsequent views on the subjects covered in the reprinted articles, including some important amendments.The book opens with an autobiographical essay that presents the intellectual climate of economics in the 1940s in which Kenneth Arrow, Frank Hahn, Martin Shubik, Otto Eckstein, and Gary Becker were beginning their careers. Baumol's introductory essays to the book's major sections take up the threads from this autobiographical piece and follow them to the development of concepts central to economic theory, applications, and methodology.Three essays in the first part provide an underpinning for the theory of contestable markets. In the second part five essays explore issues in welfare economics such as the role of diminishing and increasing returns may play the role of symmetric obstacles to Pareto optimality. Essays in the third part range from regulation and antitrust to urban economics to the Phillips curve and the pitfalls of using, in the analysis of real issues, dual values derived from linear models when the underlying reality is nonlinear. Those in the concluding part focus on the history of economic ideas such as the Smithian versus Marxian view of business morality and the social interest, the Marxian concept of value transformation, the iron law of wages, and Say's law.William J. Baumol is Professor of Economics by joint appointment at Princeton University and New York University.

 

What people are saying - Write a review

We haven't found any reviews in the usual places.

Contents

Scale Economies Average Cost and the Profitability of Marginal Cost Pricing l l
11
On the Proper Cost Tests for Natural Monopoly in a Multiproduct Industry
26
An Uprising in the Theory of Industry Structure
40
n ESSAYS IN WELFARE THEORY
55
The Price We Must Pay for a Price System
62
On the Optimality of PublicGoods Pricing with Exclusion Devices
84
The PublicGood Attribute as Independent Justification for Subsidy
101
Pricing the Products of Durable Assets
111
Technological Change and the New Urban Equilibrium
191
On the Stochastic Unemployment Distribution Model and the LongRun Phillips Curve
206
A Gothic Table
224
ON THE HISTORY OF ECONOMIC IDEAS
235
Smith vs Marx on Business Morality and the Social Interest
241
What Marx Really Meant An Interpretation
247
Marx and the Iron Law of Wages
259
Says at Least Eight Laws or What Say and James Mill May Really Have Meant
265

Applied Fairness Theory and Rationing Policy
130
HI TOWARDS APPLICATION
143
Minimum and Maximum Pricing Principles for Residual Regulation
151
A Policy for Prevention of Predatory Pricing
165
Acknowledgements
282
Index
283
Copyright

Other editions - View all

Common terms and phrases

References to this book

About the author (1986)

William Jack Baumol was born in the South Bronx, New York on February 22, 1922. He served in the Army during World War II and got a job at the Agriculture Department, where he worked on allocating grain supplies to starving countries. He graduated from City College and enrolled in the London School of Economics in 1947, after initially being rejected. Less than six weeks after school started, he was hired to become a member of the faculty. He taught at Princeton University from 1949 until 1970 and then taught at New York University from 1971 until his retirement in 2014. As an economist, he identified Baumol's cost disease, which explains why the cost of services, like haircuts and college educations, rises faster than the cost of goods, like T-shirts. He published dozens of books, hundreds of papers, and several congressional testimonies on entrepreneurs, environmental policy, corporate finance, stock sales, the economics of Broadway theaters, inflation, and competition and monopolies. He died on May 4, 2017 at the age of 95.

Bibliographic information